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Tuesday, December 6, 2022

CCI Approves Sony-Zee Merger with Conditions

The Competition Commission of India (CCI) on Tuesday gave conditional approval to the proposed merger of Zee Entertainment Enterprises Ltd and Culver Max Entertainment Pvt Ltd (formerly known as Sony Pictures Networks India).

CCI’s approval is subject to certain Conditions .

So far, both the companies, Sony and Zee, have not given any explanation on the issue.

Earlier, a unit of Sony Group and India’s Zee Entertainment proposed concessions such as price cuts to help ease concerns from the country’s antitrust regulator about their merger, Reuters reported, citing sources.

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They submitted “voluntary remedies” to the agreement in writing to assuage the watchdog’s concerns. Some media reports also claimed that one of the proposed changes included the closure of the popular general entertainment channel owned by Zee.

The delay in approval can be attributed to CCI scrutiny. In particular, CCI was concerned about how much of an impact the merged entity would have on competition in terms of advertising and channel pricing, particularly in the popular Hindi segment.

Sony and Zee in December decided to merge their TV channels, movie assets and streaming platforms to create a force in a key growth market of 1.4 billion people that will challenge rivals such as Walt Disney Co.

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Zee is a domestic television name in India, founded in 1992 by Subhash Chandra, dubbed the “Father of Indian Television”. Its founders had to dilute their stake in the Indian company in 2019 to deal with debt, and the Sony deal was closed amid a boardroom row with a foreign shareholder in 2021.

For Sony, the merger will boost its ambitions to reach more digital, TV and regional language audiences in the fast-growing Indian market, where international competitors also include Netflix and Amazon Prime Video.

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